Bond. Location undisclosed.
The spy who billed me: offshore bonds and the 7% commission
9th October 2026
Offshore bonds have roughly the same reputation among expats in Thailand as the jet-ski hire on Patong Beach. Some of that is deserved, and most of the damage comes down to how the adviser was paid. Put £250,000 into an offshore bond on a 7% commission structure and, after 15 years of steady growth, it ends up £36,691 smaller than the same bond set up with an upfront fee.
The bond itself is a sound product. We give fee-based financial advice to expats in Thailand and Southeast Asia, and we ran the same money through both versions, using the provider’s own illustrations, to show where that difference comes from.
The bond itself is a sound product. We give fee-based financial advice to expats in Thailand and Southeast Asia, and we ran the same money through both versions, using the provider’s own illustrations, to show where that difference comes from.
Two neighbours, one bond
Picture two expats who live next door to each other in Bangkok. Rob and Kate are both 41 and both have £250,000 to invest. They put it into the same offshore bond holding identical funds, and they pay their advisers the same ongoing fee.
Rob’s adviser is paid commission by the provider, so Rob never sees a bill. Kate’s adviser charges her a fee, and the provider takes a small charge at the start. Kate watches nearly £5,000 go before anything is invested, and is not thrilled about it.
They compare statements over a beer every Christmas.
After the first year, Rob is about £2,500 ahead and buys the round with a certain smugness. All of his money went in on day one, and the cost of his adviser’s commission is spread over the next ten years.
By the second Christmas they are level, and by the third Kate is clearly ahead. Rob’s plan has a charge taken every quarter to recover that commission, and hers does not. The gap gets wider every year after that.
At 56, both are starting to think about retirement. Kate is now the one buying the beers, and she can afford a lot of them.
Picture two expats who live next door to each other in Bangkok. Rob and Kate are both 41 and both have £250,000 to invest. They put it into the same offshore bond holding identical funds, and they pay their advisers the same ongoing fee.
Rob’s adviser is paid commission by the provider, so Rob never sees a bill. Kate’s adviser charges her a fee, and the provider takes a small charge at the start. Kate watches nearly £5,000 go before anything is invested, and is not thrilled about it.
They compare statements over a beer every Christmas.
After the first year, Rob is about £2,500 ahead and buys the round with a certain smugness. All of his money went in on day one, and the cost of his adviser’s commission is spread over the next ten years.
By the second Christmas they are level, and by the third Kate is clearly ahead. Rob’s plan has a charge taken every quarter to recover that commission, and hers does not. The gap gets wider every year after that.
At 56, both are starting to think about retirement. Kate is now the one buying the beers, and she can afford a lot of them.
Rob and Kate, 15 years on
| Rob (commission) | Kate (upfront fee) | |
|---|---|---|
| Adviser paid by | The provider, as 7% commission | Kate, as a fee |
| Charge built into the plan | Every quarter for ten years | None |
| Cost of leaving early | Exit charge for the first ten years | None after the cooling-off period |
| Value at 56 | £539,580 | £576,271 |
Same bond, funds and ongoing advice fee for both. Assumes 7% a year growth, not guaranteed.
Had they each invested £500,000, the gap at 56 would be £75,982.
Licensed to bill
Rob’s adviser was paid on day one. Somebody has to pay for that, and it is Rob.
The provider pays the commission upfront and recovers it through an establishment charge built into Rob’s plan for ten years. Over that decade the charge adds up to more than the commission itself. It comes out of the plan quietly in the background, so it is easy to hold one of these bonds for years without knowing what it costs.
Kate paid her setup costs at the start, where she could see them, and her plan carries no establishment charge.
Licensed to bill
Rob’s adviser was paid on day one. Somebody has to pay for that, and it is Rob.
The provider pays the commission upfront and recovers it through an establishment charge built into Rob’s plan for ten years. Over that decade the charge adds up to more than the commission itself. It comes out of the plan quietly in the background, so it is easy to hold one of these bonds for years without knowing what it costs.
Kate paid her setup costs at the start, where she could see them, and her plan carries no establishment charge.
No time to leave
Expats move, often at short notice. Suppose Rob is offered a job in Dubai after a year and wants his money out.
His plan has an early exit charge for the first ten years. It starts at more than 10% of what he paid in and shrinks a little each quarter, which protects the provider if he leaves before the commission has been recovered. On paper Rob is ahead of Kate. If they both cashed in after that first year, Rob would walk away with more than £21,000 less than she would.
A lot of the horror stories start here, when somebody tries to leave and finds the exit costs five figures.
For their eyes only
We built this comparison to flatter Rob’s version. Both plans assume a portfolio charging 0.3% a year and a 0.6% ongoing advice fee, which is what we charge. Most firms we come across charge 1% a year for advice, and the portfolios we see elsewhere usually cost far more. We even kept the investment just below the level where Kate’s upfront charge would have dropped.
Some funds go a step further. They charge a higher fee and pass part of it back to the firm that recommended them, and that arrangement appears nowhere in the bond illustration.
Add any of those to Rob’s plan and the gap gets a lot wider.
The gadget works fine
The bond did its job in both versions. An offshore bond is a life assurance policy with a portfolio of investments inside it. Growth inside the bond is largely free of tax along the way, and tax applies when money comes out, so withdrawals can be planned around where you live at the time.
Under UK rules, up to 5% of the original investment can be withdrawn each year without an immediate tax charge, which helps anyone who may move back to the UK. The bond can also be placed in trust or assigned to someone else for gifting and inheritance planning. Set up the upfront way, it can cost less than holding the same portfolio on an investment platform.
Most of the “offshore bonds are bad” talk in Thailand comes from the commission version. Kate’s version is the one we use for our clients.
Ask before you sign
Rob finds out what his bond cost him 15 or 20 years later, at the point where it decides when he can retire or how the uni fees get paid. By then the decision that caused it is long behind him. The cheapest time to fix it is before the money goes in.
Ask for the illustration and the key information document before signing anything. The costs section states whether your adviser receives commission and how much. Ask what it would cost to leave in year one, year five and year ten, what the ongoing advice fee is, what each fund in the portfolio charges, and whether any of those funds pays anything back to the firm advising you. If the adviser cannot answer those clearly, find another adviser.
You can book an initial call below.
Expats move, often at short notice. Suppose Rob is offered a job in Dubai after a year and wants his money out.
His plan has an early exit charge for the first ten years. It starts at more than 10% of what he paid in and shrinks a little each quarter, which protects the provider if he leaves before the commission has been recovered. On paper Rob is ahead of Kate. If they both cashed in after that first year, Rob would walk away with more than £21,000 less than she would.
A lot of the horror stories start here, when somebody tries to leave and finds the exit costs five figures.
For their eyes only
We built this comparison to flatter Rob’s version. Both plans assume a portfolio charging 0.3% a year and a 0.6% ongoing advice fee, which is what we charge. Most firms we come across charge 1% a year for advice, and the portfolios we see elsewhere usually cost far more. We even kept the investment just below the level where Kate’s upfront charge would have dropped.
Some funds go a step further. They charge a higher fee and pass part of it back to the firm that recommended them, and that arrangement appears nowhere in the bond illustration.
Add any of those to Rob’s plan and the gap gets a lot wider.
The gadget works fine
The bond did its job in both versions. An offshore bond is a life assurance policy with a portfolio of investments inside it. Growth inside the bond is largely free of tax along the way, and tax applies when money comes out, so withdrawals can be planned around where you live at the time.
Under UK rules, up to 5% of the original investment can be withdrawn each year without an immediate tax charge, which helps anyone who may move back to the UK. The bond can also be placed in trust or assigned to someone else for gifting and inheritance planning. Set up the upfront way, it can cost less than holding the same portfolio on an investment platform.
Most of the “offshore bonds are bad” talk in Thailand comes from the commission version. Kate’s version is the one we use for our clients.
Ask before you sign
Rob finds out what his bond cost him 15 or 20 years later, at the point where it decides when he can retire or how the uni fees get paid. By then the decision that caused it is long behind him. The cheapest time to fix it is before the money goes in.
Ask for the illustration and the key information document before signing anything. The costs section states whether your adviser receives commission and how much. Ask what it would cost to leave in year one, year five and year ten, what the ongoing advice fee is, what each fund in the portfolio charges, and whether any of those funds pays anything back to the firm advising you. If the adviser cannot answer those clearly, find another adviser.
You can book an initial call below.
